SOURCE: Gentex Corporation

Gentex Corporation

October 21, 2015 08:00 ET

Gentex Reports Third Quarter 2015 Financial Results and Additional Share Repurchase Authorization

ZEELAND, MI--(Marketwired - Oct 21, 2015) - Gentex Corporation (NASDAQ: GNTX) the Zeeland, Michigan-based manufacturer of automotive automatic-dimming rearview mirrors, automotive electronics, dimmable aircraft windows, and fire protection products, today reported financial results for the three months ended September 30, 2015.

3rd Quarter 2015 Highlights

  • Revenue growth of 11% quarter over quarter
  • Gross Margin improved from 38.4% to 39.0% sequentially from the 2nd quarter 2015
  • Operating Income increased by 13% quarter over quarter
  • Net Income increased by 8% quarter over quarter
  • Earnings per Diluted Share increased by 8% quarter over quarter to $.27 per diluted share
  • Board authorization of an additional 5 million shares for repurchase plan
  • 2.1 million shares repurchased during the quarter
  • $26.9 million of debt repaid during the quarter

For the third quarter of 2015, the Company is pleased to report net sales of $389.8 million, which was an increase of 11% compared to net sales of $350.9 million in the third quarter of 2014. On a quarter over quarter basis, foreign currency fluctuations accounted for approximately 1% of revenue headwind during the third quarter of 2015.

The gross profit margin in the third quarter of 2015 was 39.0%, compared with a gross profit margin of 39.5% in the third quarter of 2014. On a quarter over quarter basis, foreign currency fluctuations accounted for the majority of the reduction in gross profit margin, while annual customer price reductions were essentially offset by purchasing cost reductions. Sequentially, from the second quarter of 2015, the gross margin improved from 38.4%, primarily due to increased purchasing cost reductions and improvements in product mix.

Operating income for the third quarter of 2015 increased 13% to $116.3 million, when compared to operating income of $103.2 million for the third quarter of 2014.

Other income decreased to a loss of $0.2 million in the third quarter of 2015 compared with other income of $0.8 million in the third quarter of 2014, primarily due to increased interest expense as a result of the Company's implemented interest rate swap, combined with lower realized gains on the sale of equity investments during the most recently completed quarter versus the same quarter in the prior year.

Net income for the third quarter of 2015 increased 8% to $78.3 million compared with net income of $72.3 million in the third quarter of 2014.

Earnings per diluted share in the third quarter of 2015 increased 8% to $0.27, compared with earnings per diluted share of $0.25 in the third quarter of 2014, which reflects the December 31, 2014 stock split, effected in the form of a 100% stock dividend.

Automotive net sales in the third quarter of 2015 were $379.9 million, an increase of 11% compared with automotive net sales of $341.8 million in the third quarter of 2014, primarily due to a 15% increase in auto dimming mirror unit shipments quarter over quarter.

Other net sales, which includes dimmable aircraft windows and fire protection products, were $9.9 million, an increase of 9%, in the third quarter of 2015, compared with $9.1 million in the third quarter of 2014.

Share Repurchases
During the third quarter of 2015, the Company repurchased 2.1 million shares of its common stock and through nine months ended September 30, 2015, the Company has repurchased 4.9 million shares. The Company's Board of Directors has also recently authorized the repurchase of up to an additional 5 million shares of the Company's outstanding common stock, under the existing terms of the most recently announced share repurchase plan. As of September 30, 2015, the Company has approximately 6.3 million shares remaining available for repurchase in the plan including the most recent share authorization. The Company intends to continue to repurchase additional shares of its common stock in the future depending on macroeconomic issues, market trends and other factors that the Company deems appropriate.

Debt Repayment
During the third quarter of 2015, the Company paid down $25 million on its revolver loan in addition to its normally scheduled principal repayment on the Company's term loan. The Company may, at its discretion, pay additional principal toward its loans in the future, depending on macroeconomic trends, capital expenditure spending, cash and money market interest rates, the amount of available free cash and other factors that it deems appropriate for timing and amounts of incremental debt repayments.

Future Estimates
The Company's forecasts for light vehicle production for the fourth quarter and calendar year 2015 are based on the IHS Automotive October 2015 forecast for light vehicle production in North America, Europe, Japan and Korea.

   
Light Vehicle Production (per IHS Automotive October light vehicle production forecast)  
(in Millions)  
   
Region Q4 2015   Q4 2014   % Change     Calendar Year 2015   Calendar Year 2014   % Change  
North America 4.31   4.24   2 %   17.48   17.03   3 %
Europe 5.05   4.99   1 %   20.74   20.15   2.9 %
Japan and Korea 3.27   3.38   (3 )%   13.12   13.68   (4 )%
Total Light Vehicle Production 12.63   12.61   -- %   51.34   50.86   1 %
                           

Based on the above light vehicle production forecasts, the Company is providing and updating certain guidance for the fourth quarter and calendar year 2015.

 
2015 Calendar Year Guidance
  Annual Guidance
Item Updated as of 7/23/15   Updated as of 10/21/15
Net Sales $1.52 - $1.55 billion   $1.52 - $1.54 billion
Gross Margin 38.5% - 39.0%   no change
Operating Expenses (E,R&D and S,G&A) $148 - $151 million   $145-147 million
Tax Rate 31.5% - 32.0%   no change
Capital Expenditures $95 - $105 million   no change
Depreciation & Amortization $85 - $90 million   no change
       

Safe Harbor for Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements contained in this communication that are not purely historical are forward-looking statements. Forward-looking statements give the Company's current expectations or forecasts of future events. These forward-looking statements generally can be identified by the use of words such as "anticipate", "believe", "could", "estimate", "expect", "forecast", "goal", "hope", "may", "plan", "project", "will", and variations of such words and similar expressions. Such statements are subject to risks and uncertainties that are often difficult to predict and beyond the Company's control, and could cause the Company's results to differ materially from those described. These risks and uncertainties include, without limitation, changes in general industry or regional market conditions; changes in consumer and customer preferences for our products; our ability to be awarded new business; continued uncertainty in pricing negotiations with customers; loss of business from increased competition; customer bankruptcies or divestiture of customer brands; fluctuation in vehicle production schedules; changes in product mix; raw material shortages; higher raw material, fuel, energy and other costs; unfavorable fluctuations in currencies or interest rates in the regions in which we operate; costs or difficulties related to the integration of any new or acquired technologies and businesses; changes in regulatory conditions; warranty and recall claims and other litigation and customer reactions thereto; possible adverse results of pending or future litigation or infringement claims; negative impact of any governmental investigations and associated litigations including securities litigations relating to the conduct of our business. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law or the rules of the NASDAQ Global Select Market. Accordingly, any forward-looking statement should be read in conjunction with the additional information about risks and uncertainties identified under the heading "Risk Factors" in the Company's latest Form 10-K and Form 10-Q filed with the SEC.

Third Quarter Conference Call
A conference call related to this news release will be simulcast live on the Internet beginning at 10:30 a.m. EDT today, October 21, 2015. The dial-in number to participate in the call is 888-395-3227, passcode 9515045. Participants may listen to the call via audio streaming at http://www.visualwebcaster.com/event.asp?id=102887. Participants can also access that call by going to www.gentex.com and selecting the "Audio Webcast" icon on the bottom left side of the page. Other conference calls hosted by the Company will also be available at that site in the future.

About The Company
Founded in 1974, Gentex Corporation (The NASDAQ Global Select Market: GNTX) is a supplier of automatic-dimming rearview mirrors and electronics to the automotive industry, dimmable aircraft windows for aviation markets, and fire protection products to the fire protection market. Visit the Company's web site at www.gentex.com.

   
GENTEX CORPORATION  
AUTO-DIMMING MIRROR SHIPMENTS  
(Thousands)  
   
   
  Three Months Ended September 30,     Nine Months Ended September 30,  
           
  2015   2014   %
 Change
    2015   2014   %
 Change
 
North American Interior Mirrors 2,242   2,054   9 %   6,451   6,148   5 %
North American Exterior Mirrors 871   627   39 %   2,462   1,792   37 %
  Total North American Mirror Units 3,114   2,681   16 %   8,913   7,939   12 %
International Interior Mirrors 3,669   3,206   14 %   10,903   9,778   12 %
International Exterior Mirrors 1,541   1,347   14 %   4,614   4,022   15 %
  Total International Mirror Units 5,210   4,553   14 %   15,517   13,800   12 %
Total Interior Mirrors 5,911   5,259   12 %   17,354   15,926   9 %
Total Exterior Mirrors 2,412   1,974   22 %   7,076   5,813   22 %
  Total Auto-Dimming Mirror Units 8,324   7,233   15 %   24,430   21,739   12 %

Note: Percent change and amounts may not total due to rounding.

 
 
 
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 
(Unaudited)
                 
  Three Months Ended September 30,   Nine Months Ended September 30,
  2015     2014   2015   2014
Net Sales $ 389,829,139     $ 350,913,912   $ 1,138,025,071   $ 1,025,090,220
                         
  Cost of Goods Sold   237,932,439       212,288,220     697,492,531     620,873,493
    Gross profit   151,896,700       138,625,692     440,532,540     404,216,727
                         
  Engineering, Research & Development   21,505,461       21,671,940     65,408,256     62,395,241
  Selling, General & Administrative   14,128,619       13,747,925     43,020,328     41,602,675
    Operating Expenses   35,634,080       35,419,865     108,428,584     103,997,916
                         
  Income from operations   116,262,620       103,205,827     332,103,956     300,218,811
                         
  Other Income   (214,878 )     786,780     2,811,849     11,087,889
Income before Income Taxes   116,047,742       103,992,607     334,915,805     311,306,700
                         
Provision for Income Taxes   37,715,317       31,655,724     104,841,502     93,677,000
                         
Net Income $ 78,332,425     $ 72,336,883   $ 230,074,303   $ 217,629,700
                         
Earnings Per Share                        
  Basic $ 0.27     $ 0.25   $ 0.78   $ 0.75
  Diluted $ 0.27     $ 0.25   $ 0.77   $ 0.74
Weighted Average Shares                        
  Basic   292,589,866       290,969,434     293,742,028     290,383,296
  Diluted   295,377,478       292,875,952     296,994,572     292,918,052
                         
Cash Dividends Declared per Share $ 0.085     $ 0.08   $ 0.25   $ 0.23
 
 
 
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
  (Unaudited)
September 30, 2015
  December 31, 2014
ASSETS          
Cash and Cash Equivalents $ 564,528,197   $ 497,429,804
Accounts Receivable, net   208,203,616     168,008,704
Inventories   164,604,063     141,757,884
Other Current Assets   41,867,345     49,441,302
Total Current Assets   979,203,221     856,637,694
           
Plant and Equipment - Net   388,188,954     373,390,992
           
Goodwill   307,365,845     307,365,845
Long-Term Investments   94,424,586     114,642,567
Intangible Assets   332,400,000     346,875,000
Patents and Other Assets   22,428,765     23,627,931
Total Other Assets   756,619,196     792,511,343
           
Total Assets $ 2,124,011,371   $ 2,022,540,029
           
LIABILITIES AND SHAREHOLDERS' INVESTMENT          
Current Liabilities $ 181,629,886   $ 133,431,163
Long-Term Debt   227,500,000     258,125,000
Deferred Income Taxes   43,785,884     59,571,421
Shareholders' Investment   1,671,095,601     1,571,412,445
Total Liabilities & Shareholders' Investment $ 2,124,011,371   $ 2,022,540,029
           

Contact Information

  • Contact Information:
    Gentex Investor & Media Contact
    Josh O'Berski
    (616)772-1590x5814